John - This seems to be a limitation of the jacobian code generation, when that jacobian code is being generated from certain types of PDE code. This is likely a structural thing with the way jacobian code generation is implemented at the moment, so the implementation will need to be fixed first. This sort of code generation is a relatively new approach , so people are still trying to iron the problems out - but rest assured that this is being looked at, and that more attention is on it now.
Is there any way that in the meantime that you could approach your problem without automatic jacobian generation, or more memory? Or is this a hard limitation?